Tencent-backed Enflame triples in Shanghai debut

Enflame Technology’s tripling valuation on its Shanghai debut, reaching 185 billion yuan, reflects strong investor appetite for Chinese AI chip firms. This surge is driven by Beijing’s push for self-sufficiency in computing chips, creating a protected market for domestic players like Enflame, Moore Threads, MetaX, and Biren Technology. The company’s reliance on Tencent, its largest shareholder and customer, for 83.79 percent of its 2025 revenue, suggests a concentrated customer base that could pose risks if that relationship shifts. While the IPO was a success, Enflame has yet to turn a profit, reporting a net loss of 1.16 billion yuan in 2025. Its forecast for a net loss of 700 million to 860 million yuan for the first nine months of 2026 indicates that profitability is still some time away, with projections for breaking even in 2026 or 2027. The substantial capital raised, however, will fund critical R&D for its fifth and sixth-generation AI chips, which is essential for long-term competitiveness in China’s rapidly evolving AI sector.